Future spread down 679 bps
KARACHI: The futures spread declined by 679 basis points, closing at 5.19 percent on the final trading day of the week ending May 30, 2025, compared to 11.98 percent in the previous week.
Average daily volumes at future counter increased by 272 percent to 367.22 million shares, up from 98.71 million shares a week earlier. In addition, the average daily traded value on the also surged by 286 percent, reaching Rs 22.14 billion as against Rs 5.74 billion in the preceding week.
Copyright Business Recorder, 2025
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ISLAMABAD: The Power Division on Monday submitted the much-talked about review motion challenging the National Electric Power Regulatory Authority's recent Multi-Year Tariff (MYT) determinations for K-Electric (KE) for 2024-25 to 2029-30. The government is urging Nepra to revise key assumptions, performance benchmarks and profit margins in line with real-world data and standards applied to other power utilities. According to Power Division, Nepra allowed KE several cost items and profit margins that are more generous than those granted to other utilities across the country. As a result, electricity bills for Karachi consumers are set to rise disproportionately, and public finances will bear an unnecessary burden. Total financial impact is in excess of Rs 300 billion of the intervention identified for review by GoP in KE MYT. Power Minister, Sardar Awais Khan Leghari, in his tweet said that the power sector of Pakistan cannot afford any inefficiencies encouraged through tariff structure of any company, irrespective of whether it is private or public. 'Our review supports a sustainable and healthy environment in the distribution system of Pakistan in a responsible manner. Power Division hopes that the review process is carried out in a transparent and fair manner,' he added. The key concerns in the Review Petition are as follows: Supply (fuel and fuel related costs): Nepra set KE's fuel-cost rate at Rs. 15.99/kWh, whereas other utilities buy power at lower rates from the national grid. This gap shifts about Rs. 28 billion (FY 2024) and Rs. 13 billion (FY 2025) of extra costs onto the federal budget rather than onto KE customers. Recovery Loss Allowance: KE was permitted to include 'recovery losses' in its tariff even though its own records show it recovers more than the level Nepra allowed. No other utility received this special allowance. This adds roughly Rs. 36 billion in FY 2024 and Rs. 35 billion in FY 2025 to KE's revenue that consumers end up paying. Cumulative impact over a 7-year period is more than Rs 200 billion. Working Capital Allowance: NEPRA permitted KE a 24 percent markup on working capital, a much higher percentage than in its previous tariff and higher than any other power distributor. This increased KE's allowable revenue by about Rs. 2.4 billion in FY 2024 and is projected to total around Rs. 15 billion over the control period of 7 years Higher Allowed Distribution Loss: Nepra set KE's allowed loss at 13.90 percent, instead of the 13.46 percent KE had planned. Losses are electricity that is generated but not billed, due to leaks or theft, or kunda. Around 7 percent of all such leakages can be attributed to theft. By permitting a higher loss level, KE passes on an extra Rs. 3.1 billion in FY 2024, rising to about Rs. 21 billion over the control period. 'Law & Order' Margin: KE received a special 2 percent margin to offset security costs in Karachi—a perk not granted to any other utility, even those operating in equally or more volatile regions. Moreover, Law & Order in Karachi has improved considerably over the last few years, and thereby there exists no reason for such a margin. This margin adds approximately Rs. 14 billion in FY 2024 and up to Rs. 99 billion over the multi-year period to KE's revenue requirement. Retention of 'Other Income': KE is allowed to keep money from fines imposed on its contractors, interest on bank deposits, and profits from side businesses. In effect, consumers have already paid for the assets that generate these incomes, so these funds should reduce KE's costs to customers, not pad its revenue. 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For regulatory accountability Nepra should revise assumptions, benchmarks, and profit margins so they align with real performance data and the standards used for other utilities. Copyright Business Recorder, 2025
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LAHORE: The Pakistan Kissan Ittehad (PKI) has warned the government against imposing general sales tax (GST) on agricultural inputs in the upcoming budget, stating that such a move would deal a final blow to the already struggling agricultural sector and further damage the national economy. 'The government should instead take immediate steps to reduce the cost of agricultural production,' said PKI President Khalid Mahmood Khokhar during a press conference on Monday. Khokhar accused the current leadership of pursuing policies that serve their political interests at the expense of farmers, causing irreparable damage to the sector and contributing to a sharp decline in crop production. 'Around the world, agriculture and food security are considered top priorities by governments. Unfortunately, in Pakistan, the sector is being undermined due to pressure from international financial institutions,' he said. Flanked by fellow PKI members, Khokhar highlighted the country's rapid population growth, warning that Pakistan is adding hundreds of thousands of mouths to feed every year. 'If we fail to stabilise and strengthen our agricultural system, we are heading toward catastrophe,' he warned. He further criticised the imbalance in taxation, noting that while there is no tax on imported cotton, locally grown cotton is subject to 18% GST. 'As a result, cotton production has plummeted from 14.7 million bales to just 5 million,' he said. He added that the country's import bill continues to swell due to the increasing reliance on imported food, while exports of key crops like mangoes, kinnow, and maize have halved in the past year. The PKI representatives emphasized that they are not seeking charity - only fair returns for their produce in line with international standards. 'Farmers should be able to earn a reasonable profit for their hard work,' they insisted. Khokhar painted a grim picture of farmers' current conditions, saying many are in rags and unable to apply adequate amounts of fertilizer or other inputs to their fields, resulting in declining per-acre yields. 'Farmers don't even have enough money to meet household expenses. Some have even had to postpone their daughters' weddings due to poor returns on their wheat crops,' he lamented. The PKI also rejected the Rs 15 billion relief package announced for wheat growers, calling it grossly insufficient against the estimated Rs 1,600 billion in losses. Khokhar urged the Punjab agriculture minister to fulfill his responsibility and work actively to improve the livelihoods and well-being of farmers. Copyright Business Recorder, 2025
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